The day Australia was put on blackout alert



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One big mess: the market has failed to deliver on cheap, reliable energy.
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David Blowers, Grattan Institute

The only way the Australian Energy Market Operator (AEMO) could be blunter in its report on the state of our electricity system would be to stick a neon sign on top of its Melbourne head office saying “The market has failed”.

AEMO’s Advice to Commonwealth Government on Dispatchable Capability, released today, shows there are significant but manageable risks of the lights going out in South Australia and Victoria over the next two summers. And beyond 2018, AEMO will need more tools if shortfall risks are going to be dealt with.

The conclusions about the short-term risks are not surprising. AEMO has issued several reports over the past year or so telegraphing supply shortfalls in the next couple of years.

What is surprising is its view that action needs to be taken when Liddell, the AGL-owned power station in New South Wales, closes in 2022. That is five years away, and AGL has been trumpeting the decision at every opportunity, but AEMO is clearly not confident that the market will respond by delivering new generation, or storage, or demand response, to fill the gap.


Read more: AGL rejects Turnbull call to keep operating Liddell coal-fired power station


AEMO recommends immediate development of a strategic reserve that it can deploy to prevent loss of power over the next few summers. A strategic reserve is basically back-up generation (or storage or demand response) that is used only in an emergency.

AEMO’s job is to make sure there is enough generation available – that supply equals demand. A strategic reserve will deliver the capacity – be it gas generation, storage or demand response – that it needs to meet any shortfall. Neither coal nor wind and solar can fulfil this function. Coal takes too long to come online, while wind and solar provide intermittent supply so there is no certainty that renewable energy will be there when needed.


Read more: Managing demand can save two power stations’ worth of energy at peak times


A strategic reserve is an insurance policy, only to be used in extreme circumstances. And like any insurance policy it has a cost – a cost that will be passed on to consumers. Of course, if electricity keeps being delivered as required over the next two summers, governments and consumers may well consider this money well spent.

But a strategic reserve does not deal with the second problem AEMO is seeking to solve: that not enough dispatchable generation is being built in the National Electricity Market. Even with backup generation controlled by AEMO, Australia will still need new generation to provide day-to-day power when existing power stations such as Liddell close.

AEMO’s second major recommendation is the immediate “development of a longer-term approach to retain existing investment and incentivise new investment in flexible dispatchable capability in the NEM”.


Read more: The government’s new energy plans will leave investors less confident than ever


Since it was set up 20 years ago, the NEM has delivered sufficient generation to meet demand, and at a reasonable cost. But this report makes it clear that AEMO believes this is no longer the case and that changes to the market are needed.

The report is understandably silent on what this “longer-term approach” might look like, given that market design is tricky. But the report is unequivocal that a new mechanism needs to be in place by the time Liddell closes. If not, supply shortages – and the associated loss of power to consumers – will be far more likely.

AEMO has provided the federal government with a pathway to securing electricity supply for the foreseeable future. There will be costs, but all governments will have greater assurances that the lights will stay on.

What AEMO hasn’t done is call out the policy instability that has been a major reason we have got ourselves into this mess. Commentators, Chief Scientist Alan Finkel, and numerous industry players – including the Big Three owners of generation in Australia – have all long been arguing that the major barrier to investment in the NEM has been the dog’s breakfast that is climate change policy.

The federal government can use this report to satisfy critics within its own party that there is a plan to ensure enough dispatchable generation in the NEM.

But the government must not use AEMO’s report as a get-out clause that allows it to continue to avoid creating an effective emissions reduction policy in the electricity sector. If anything, the report should stand as a stark warning to politicians of all stripes about what happens when you get policy so badly wrong.

Bipartisan agreement on the only politically acceptable emissions reduction policy – a Clean Energy Target – may not be sufficient, but remains absolutely necessary, to ensure there is enough generation to meet Australia’s electricity needs.

The ConversationAEMO has shown it is willing to do its job. It is now up to our politicians to do theirs.

David Blowers, Energy Fellow, Grattan Institute

This article was originally published on The Conversation. Read the original article.

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GAZA CONFLICT TAKING TOLL ON BOTH SIDES OF BORDER


Christians normally permitted to leave Gaza for Bethlehem during Christmas found themselves unable to return home and separated from their families when fighting erupted between Israel and Hamas-controlled Gaza in late December, reports Baptist Press.

Isa,* a layman at Gaza Baptist Church, was one of those separated from his family. He returned to Gaza on Dec. 26 to take care of some church business. His family remained in Bethlehem, unaware the borders were about to close. “This is the worst it has ever been [in Gaza],” Isa told a Christian worker.

The Gaza Baptist Church building has sustained damage over the past two weeks. According to a Christian worker, the majority of the damage occurred Dec. 27 when a police station across the street took a direct hit.

Another Christian family found themselves separated when they tried to exit Gaza to find safety in Israel, the Christian worker said. The father and his two sons were allowed to go to Bethlehem, but the wife and two daughters were not. The man quickly returned to Gaza, despite the violence.

Residents of Israel are struggling, too.

One Israeli soldier asked a Christian worker to pray for him while he was at war. To the worker’s surprise, the soldier didn’t ask him to pray for his safety but rather that he wouldn’t have to use his gun.

Life must go on — even in scary situations, the Christian worker added.

A nurse in southern Israel was on her way to a hospital one morning when bomb sirens started blaring. “You can’t stay in your car, because the shrapnel will kill you,” a Christian worker in the area said. “You have to get out of your car and lie in the ditch beside the road.”

Schools in southern Israel have been closed because of bomb threats. Many kindergarten buildings have been hit directly by missile fire from Gaza, a worker said; however, no children or teachers were inside at the time.

“Pray that those who want peace will have the victory,” the worker said. “There’s a lot of praying [among Israeli believers], not only for the soldiers but for the believers in Gaza.”

The hope of Christian workers in Israel is that calm will be restored quickly and that the economy will recover.

Employment in Gaza has plummeted, the worker noted. Twenty years ago nearly 100,000 men went into Israel daily to work; before the latest conflict that number had decreased dramatically. Now, with the border closing, it is down to zero.

Flour has been scarce for more than a week in Gaza — in a culture where bread is served with every meal, the worker said. When a bakery does receive a shipment, it is not uncommon for more than 600 people to line up for the chance to get one piece of flatbread.

Even if families have flour, rotating blackouts make baking nearly impossible, the worker explained. They never know when electricity will be available. Some areas of Gaza haven’t seen power for five days.

Because food, water and electricity are limited in Gaza, Israel is promising to allow aid to reach Palestinian civilians during a three-hour period each day, according to news reports. Food, water, cooking oil and medicine are among the supplies expected to flow into the area.

Report from the Christian Telegraph